Swiss funds almost halve returns to 6.58%

SWITZERLAND - Swiss pension funds returned 6.58% in 2006 compared to 12.62% in 2005, according to Credit Suisse.

Returns in 2006 were dampened by a negative performance of -2.27% in the second quarter. Nevertheless, fund assets increased by CHF40bn (€24.7bn) to CHF615bn compared to a CHF65bn increase from 2004 to 2005.

The best performers among the pension funds in the Credit Suisse Pension Fund Index were those with assets in between CHF500m and CHF1bn, which had returns of 7.05%.

According to the data gathered from global custody mandates by Credit Suisse, Swiss pension funds are continuing to cut their exposure to domestic bonds and equities. Investments went down 2.29% and 1.26% respectively over the last year.

In return, real estate exposure reached a new high of 14%, up from 12.1% a year ago.

In its quarterly review of the Swiss autonomous pension fund sector, which makes up about 80% of assets in the country's second pillar, Credit Suisse noted that the reduction in equity investments took place "in spite of the buoyant markets".